What Is a Stablecoin?
A stablecoin is a type of cryptocurrency that seeks to maintain a stable price by pegging its market value to another asset. It can be gold, fiat currencies, cryptoassets, as well as other commodities and financial instruments.
Interesting fact! The main purpose of stablecoins is to provide a relatively stable cryptocurrency that is more suitable for regular transactions.
Stablecoins play an important role in the crypto economy because, unlike other volatile coins, they aim to preserve their value, making them easier to implement and use regularly.
The main types of stablecoins are:
- Fiat-collateralized stablecoins are pegged to a specific asset, often fiat currencies (such as the US dollar), gold, and others.
- Crypto-collateralized coins are backed by other cryptocurrencies. Since the reserve crypto asset can also be volatile, such tokens are often overcollateralized.
- Algorithmic coins are also called non-collateralized stablecoins that use algorithms to automatically adjust them to maintain price.
Source: Medium
The first stablecoin created for mass adoption was BitUSD, launched on the BitShares blockchain in 2014. However, the token, like many alternatives of that time, lost its peg to the dollar in 2018 and never recovered. The lack of regulation, and no proof of coins being fully backed by reserves, led to its collapse.
Important! The primary fallout of another popular UST stablecoin’s crash was a strident call for increased regulation of the stablecoin crypto industry, especially to confirm reserves.
Due to the numerous failed stablecoin projects and calls for increased regulation, the project developers focused on compliance with the strict Isle of Man and British financial rules while keeping increased usage and reduced volatility. Here’s where 1GBP comes in.
What Is 1GBP?
$1GBP is a stablecoin backed by the Great British Pound Sterling (GBP) held in bank accounts. This means that 1GBP, also known as “poundtoken,” can be converted 1:1 ratio with the pound sterling. Poundtoken is also the first regulated stablecoin in the British Isles.
Interesting fact! The pound token was launched by Blackfridge SC Ltd, a fintech company backed by British financial regulations.
Stablecoin is designed to provide stability and can always be exchanged for GBP at a 1:1 ratio. Its mission is to provide unparalleled liquidity, universal adoption, and maximum utility while maintaining transparency and security.
Important! The token was recently rebranded and now exists under the new name «1GBP», while it was previously called GBPT.
Thus, at the moment, 1GBP represents an excellent digital alternative to the British currency, as it provides direct GBP access to DeFi protocols and digital asset exchanges.
Source: Poundtoken
How Does Poundtoken Work?
The pound token is built on the Ethereum network and uses the ERC-20 token standard. In addition, it utilizes smart contracts to facilitate the purchase, storage, transactions, and transparent collateral of the poundtoken.
Blackfridge, the company that launched the stablecoin, holds 100% of the paper reserves for each coin in separate European bank accounts. To confirm the stability and security of $1GBP, it undergoes a monthly confirmation of reserves and an annual financial audit by KPMG.
«Poundtoken holds a Money Transmission Services Licence issued by the Isle of Man Financial Services Authority» - Poundtoken.io.
The pound stablecoin team pays great attention to the security of the project, particularly account security and verification, as well as technical audits, to make the platform and $1GBP’s use as safe as possible. The whitepaper and license information can be found on the official website Poundtoken.io.
1GBP Tokenomics
- The current 1GBP price as of July 12, 2024 is $1.48 USD
- A 24-hour trading volume of the token is $29.15 USD
- The total supply of 1GBP is 3.46 million tokens
- The current CoinMarketCap ranking is #7475
- The all-time high price was achieved on Aug 21, 2023 - at $1.74, while the all-time low was on July 01, the same year - at $0.00047.
$1GBP Main Features
- Built for Everyone. Poundtoken can be used by exchanges, businesses, individuals as well as other financial institutions. Stablecoin allows users to convert pounds to 1GBP to store it, trade on-chain, send and receive fast international payments, and perform several other functions.
- KPMG Audited. Blackfridge partners with the Isle of Man's Financial Services Authority and conducts monthly audits with the KPMG auditing firm KPMG. KPMG verifies that 1GBP is 100 percent backed by the GBP by issuing proof-of-reserve statements monthly.
- 100 % Backed by GBP. Unlike most stablecoins pegged to crypto or U.S. dollars, the 1GBP is tied to the UK’s pound. 1GBP is one of the most traded currencies in the world. Every $1GBP is fully backed by fiat GBP in bank reserves.
- Solid Financial Regulation. The Isle of Man's Financial Services Authority governs the 1GBP and the Blackfridge. Thus, Poundtoken is supported and licensed by the British financial regulatory regime.
- Safety. Since GBPT stablecoin is built on the Ethereum blockchain and uses ERC20 smart contracts, all the transactions are encrypted, immutable, and secure. In addition, Poundtoken.io regularly undergoes audits and takes care of account security and verification.
Source: Poundtoken
Comparison $1GBP & Other Stablecoins
1GBP vs. USDT
USDT is a stablecoin pegged to the U.S. dollar, that was launched by Tether in July 2014. At first, it was named RealCoin, but in November the stablecoin was rebranded and called USDT. The stablecoin is backed by Tether's dollar reserves and is the biggest project among stablecoins. It is also the third most popular cryptocurrency in the world behind Bitcoin and Ethereum.
Important! USDT is 100% backed by Tether’s reserves. Tether also publishes a daily record of the current total assets and reserves.
Even though Tether calls itself to be entirely regulated, it once lost its peg to the dollar, trading at less than a dollar for a while. Unlike USDT, 1GBP works relying on the rules set by regulatory authorities. However, these stablecoins also have similarities since both of them are centralized.
1GBP vs. USDC
USDC is the second most famous stablecoin on the market, also pegged to the U.S. Dollar. USDC has a more reliable reputation since stablecoin has to obey audit and U.S. money transmission requirements.
Interesting fact! USDC is famous for its near-zero global payment cost and worldwide access.
Stricter regulations and the ability to redeem it 1:1 for US dollars make USDC quite similar to 1GBP. Moreover, as with 1GBP, USDC was created for mass adoption and global payments. Another similarity between these stablecoins is that they are both fully reserved and have regularly published attestations.
1GBP vs. TUSD
TrueUSD is a completely collateralized stablecoin backed by the U.S. dollar. The 1GBP is pretty similar to the TUSD on the regulatory side, as they’re both subjected to regular audits and compliant with state regulators. Besides, similar to 1GBP being backed by GBP, TUSD is fully backed by its U.S. dollar. As with 1GBP, TUSD also publishes daily audit reports on its site.
Interesting fact! To ensure safety, TUSD has its underlying reserves certified daily by independent third-party agencies.
Closing Thoughts
1GBP can be called a reliable stablecoin completely backed by GBP. One of its core values is consumer protection, which is why 1GBP has a Money Transmission Services License issued by the Isle of Man Financial Services Authority.
Stablecoin is created for global adoption and can be used for holding, trading on exchanges, sending and receiving almost instant international payments, and other web3 activities. With its full backing, license, and many useful features, 1GBP has every chance to gain a foothold in the market among the popular stablecoins.